Leak Detected in Keystone Pipeline Ahead of Nebraska Vote on Extension -- Update

TransCanada Corp.'s Keystone pipeline leaked roughly 5,000 barrels of oil in South Dakota, the company announced on Thursday.

Although the company isolated the problem quickly and shut down the pipeline, the leak comes only a few days before the Nebraska Public Service Commission decides whether to let the company build a controversial extension through their state.

TransCanada shut down the pipeline Wednesday morning after its systems detected the leak, the company said in a statement. The leak amounts to 210,000 gallons. Sections of the pipeline that runs from Canada's Alberta province to Illinois will be shut, although parts of the southern leg to Texas will stay open.

The leak comes at an awkward time for Calgary-based TransCanada. The company is seeking approval to build an extension of the pipeline and is awaiting an important vote from the Nebraska Public Service Commission, expected on Monday.

Opponents of the extension, who argue that it endangers the environment, said the leak only demonstrates the weakness of the pipeline. Thursday's leak is much larger than a leak in South Dakota last year, said Jane Kleeb, founder of Keystone opposition group Bold Nebraska.

"Here is one more reason the PSC should side with Nebraskans over this foreign oil company," she said, in an interview. She said the group is pushing news of Thursday's leak on social media sites and has hired an aerial photographer to take pictures of the area in South Dakota where the oil leaked, near the border with North Dakota.

TransCanada spokespeople didn't respond to requests for comment.

Write to Vipal Monga at vipal.monga@wsj.com

(END) Dow Jones Newswires

November 16, 2017 18:33 ET (23:33 GMT)